[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]








   THE AMERICAN ENERGY INITIATIVE, PART 10: PIPELINE SAFETY OVERSIGHT

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 16, 2011

                               __________

                           Serial No. 112-63




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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
MARY BONO MACK, California           BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
SUE WILKINS MYRICK, North Carolina   DIANA DeGETTE, Colorado
  Vice Chairman                      LOIS CAPPS, California
JOHN SULLIVAN, Oklahoma              MICHAEL F. DOYLE, Pennsylvania
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas            CHARLES A. GONZALEZ, Texas
MARSHA BLACKBURN, Tennessee          JAY INSLEE, Washington
BRIAN P. BILBRAY, California         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
JOHN SULLIVAN, Oklahoma              BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois
GREG WALDEN, Oregon                  JAY INSLEE, Washington
LEE TERRY, Nebraska                  JIM MATHESON, Utah
MICHAEL C. BURGESS, Texas            JOHN D. DINGELL, Michigan
BRIAN P. BILBRAY, California         EDWARD J. MARKEY, Massachusetts
STEVE SCALISE, Louisiana             ELIOT L. ENGEL, New York
CATHY McMORRIS RODGERS, Washington   GENE GREEN, Texas
PETE OLSON, Texas                    LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
CORY GARDNER, Colorado               CHARLES A. GONZALEZ, Texas
MIKE POMPEO, Kansas                  HENRY A. WAXMAN, California (ex 
H. MORGAN GRIFFITH, Virginia             officio)
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Comonwealth of Kentucky, opening statement.....................     1
    Prepared statement...........................................     2
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     4
    Prepared statement...........................................     5
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, prepared statement.............................     6
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................   170
Hon. John Sullivan, a Representative in Congress from the State 
  of Oklahoma, prepared statement................................   182

                               Witnesses

Cynthia L. Quarterman, Administrator, Pipeline and Hazardous 
  Materials Safety Administration, U.S. Department of 
  Transportation.................................................     7
    Prepared statement...........................................     9
Andrew J. Black, President, Association of Oil Pipe Lines, and on 
  Behalf of the American Petroleum Institute.....................    18
    Prepared statement...........................................    20
Carl Weimer, Executive Director, Pipeline Safety Trust...........    38
    Prepared statement...........................................    40
Christopher A. Helms, Executive Vice President and Group CEO, 
  Nisource Gas Transmission and Storage, and on behalf of the 
  Interstate Natural Gas Association of America..................    61
    Prepared statement...........................................    63
Charles F. Dippo, Vice President, Engineering Services and System 
  Integrity, South Jersey Gas Company, and on behalf of the 
  American Gas Association.......................................    85
    Prepared statement...........................................    87
Anthony Swift, Energy Analyst, International Program, Natural 
  Resources Defense Council......................................   104
    Prepared statement...........................................   106

                           Submitted material

Texas Pipeline Best Practices Resolution, submitted by Mr. 
  Burgess........................................................   184

 
   THE AMERICAN ENERGY INITIATIVE, PART 10: PIPELINE SAFETY OVERSIGHT

                              ----------                              


                        THURSDAY, JUNE 16, 2011

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:33 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Ed 
Whitfield (chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Shimkus, Terry, 
Burgess, Bilbray, Olson, Pompeo, Griffith, Barton, Upton (ex 
officio), Rush, Inslee, Green, and Waxman (ex officio).
    Staff present: Carl Anderson, Counsel, Oversight; Gary 
Andres, Staff Director; Charlotte Baker, Press Secretary; Anita 
Bradley, Senior Policy Advisor to Chairman Emeritus; Maryam 
Brown, Chief Counsel, Energy and Power; Aaron Cutler, Deputy 
Policy Director; Andy Duberstein, Special Assistant to Chairman 
Upton; Garrett Golding, Legal Analyst, Energy; Cory Hicks, 
Policy Coordinator, Energy and Power; Katie Novaria, 
Legislative Clerk; Caitlin Haberman, Democratic Policy Analyst; 
and Alexandra Teitz, Democratic Senior Counsel, Environment and 
Energy.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. I would like to call this hearing to order. 
This is our 10th day of the American Energy Initiative. We have 
had a serious of hearings on the energy needs of the American 
people, and today we are going to turn our focus to a 
particularly important issue, and that is pipeline safety.
    Recent major pipeline accidents in San Bruno, California; 
Marshall, Michigan; and Allentown, Pennsylvania have thrust our 
attention on the Nation's pipeline system and the regulations 
that ensure their safety. Today we hope to reconvene the 
dialogue that began last year with a similar hearing called in 
response to those accidents. And, of course, the last time that 
pipeline safety was reauthorized was back in 2006, and it is 
time for us to revisit that as well.
    As some in this room might remember, our last pipeline 
safety reauthorization bill, as I said, was in 2006. We worked 
together in a lengthy bipartisan process that allowed us to 
pass the bill under suspension on the House floor. The PIPES 
Act expired in December of last year, but funding levels remain 
in place under the present Continuing Resolution.
    It is our intention to craft a pipeline safety bill that 
enhances current authorities and can provide greater protection 
for our infrastructure, communities, and the environment. This 
process begins today with this hearing. We have wide and 
varying interests represented on the witness panel and I look 
forward to hearing their perspective on all of these issues. 
With the information and discussion provided today, committee 
members can get the proper context for the issues we will work 
together on later this summer.
    Although the major accidents mentioned earlier should be a 
part of today's dialogue, I am sure we will not rush to any 
conclusion before the National Transportation Safety Board 
completes its investigations. We have been told this will not 
happen for several months or possibly even next year. Before we 
write laws or push for regulations that explicitly address 
those accidents, we should wait until all the facts are in. 
Until that time, there are several areas where pipeline safety 
can and should be improved which we can get moving in the very 
near future.
    It is my belief that Members from both sides of the aisle 
can find a common purpose on these issues and work together to 
produce effective and meaningful legislation that protects the 
public and environment.
    And at this point I would like to recognize Mr. Waxman for 
the purpose of making an opening statement.
    [The prepared statement of Mr. Whitfield follows:]

                Prepared Statement of Hon. Ed Whitfield

    In our ninth day of the American Energy Initiative hearing, 
we will turn our attention to a very important and bipartisan 
issue confronting all of our constituents--pipeline safety. 
Recent major pipeline accidents in San Bruno, California, 
Marshall, Michigan, and Allentown, Pennsylvania have thrust our 
attention on the nation's pipeline system and the regulations 
that ensure their safety. Today we hope to reconvene the 
dialogue that began last year with a similar hearing called in 
response to these accidents.
    In Kentucky, we have a major artery that serves 140,000 
customers and 31 counties, many of which are in my District. I 
am sure other Members of this committee can talk about the 
impact that pipelines have on their District. We must make sure 
these pipelines are safe.
    As some in this room might remember, our last pipeline 
safety reauthorization bill made its way through committee in 
late 2006. We worked together in a lengthy bipartisan process 
that allowed us to pass the bill under suspension on the House 
floor. The PIPES Act expired in December of last year, but 
funding levels remain in place under the present Continuing 
Resolution.
    Rather than simply pushing this issue further down the 
road, it is our intention to craft a pipeline safety bill that 
enhances current authorities and can provide greater protection 
for our infrastructure, communities, and the environment.
    This process begins today with this hearing. We have wide 
and varying interests represented on the witness panel and I 
look forward to hearing their perspective. With the information 
and discussion provided today, committee members can get the 
proper context for the issues we will work together on later 
this summer.
    Although the major accidents mentioned earlier should be a 
part of today's dialogue, we should restrain ourselves from 
rushing to conclusions before the National Transportation 
Safety Board completes its investigations. We have been told 
this will not happen for several months or possibly next year. 
Before we write laws or push for regulations that explicitly 
address those accidents, we should wait until all the facts are 
in. Until that time, there are several areas where pipeline 
safety can and should be improved which we can get moving in 
the near future.
    It is my belief that members from both sides of the aisle 
can find a common purpose on these issues and work together to 
produce effective and meaningful legislation that protects the 
public and environment.
    I thank the witnesses for being here And I now yield to the 
Ranking Member, Mr. Rush for his opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    The ranking member of the subcommittee, Congressman Rush, 
was unable to be here at the beginning of this hearing because 
the time had been changed and he had already made a previous 
engagement. But I understand he will be given a chance to make 
an opening statement when he arrives.
    It is clear we need to pay serious attention to pipeline 
safety. Experts have been warning of the hazards of 
deteriorating infrastructure in this country, and natural gas 
and hazardous material pipelines are a prime example. There has 
been a burst of new construction in the last few years which 
puts further stress on pipeline safety oversight resources. The 
system is showing clear signs of strain and people and the 
environment are paying the price.
    Here is what we have seen over the past year and a half: 
two natural gas pipeline explosions that killed 13 people and 
damaged over 150 homes and businesses; a spill of over 800,000 
gallons of diluted bitumen, a heavy tar-like substance from the 
Canadian tar sands into the Kalamazoo River, 30 miles of the 
river expected to remain closed over a year after the spill, 
and cleanup costs are estimated at over $500,000 million; a 
second spill of over 250,000 gallons from the same pipeline 6 
weeks later; 12 spills on the new Keystone pipeline in its 
first year of operation. This pipeline also carries diluted 
bitumen. Most of these spills were small, but after two larger 
ones, PHMSA shut down the pipeline finding that continued 
operation without corrective action would be hazardous to life, 
property, and the environment; a trench collapse for the new 
Bison natural gas pipeline in Montana, moving fishers 3 to 4 
feet deep and hundreds of feet long.
    In addition, PHMSA recently found that some steel pipe 
produced between 2007 and 2009 was defective. Five of the seven 
pipelines PHMSA investigated contained the defective pipe, 
which had to be replaced, but other pipelines may also have 
used it. There is no current requirement for them to test for 
defective steel pipe.
    These pipeline incidents are tragic and we must act to 
prevent more loss of life and property in the future. These 
incidents are the canary in the coalmine, warning about the 
state of our pipeline safety. We may pay a very high price for 
ignoring these warnings. We need to make sure that we are 
anticipating and preventing these pipeline safety disasters 
before they occur. In particular, oil companies are rapidly and 
dramatically expanding the quantity of tar sands crude in the 
form of diluted bitumen. That they are moving through pipelines 
in this country, concerns have been raised that diluted bitumen 
poses a greater risk both in terms of the likelihood of spills 
and the challenges of cleanup.
    We need to understand these risks and address them and we 
need to do that before approving another tar sands pipeline, 
not after a pipeline is built with inadequate protections. Yet 
just yesterday this subcommittee moved legislation to short-
circuit the approval process for the newest tar sands pipeline 
before holding this hearing. That legislation is a mistake. We 
should understand the unique safety concerns for tar sands 
pipelines, not accelerate pipeline approval.
    We have had a history of bipartisan action on pipeline 
safety, and there is a lot of room for agreement in this area. 
I look forward to working with the Republican majority on this 
issue.
    Mr. Whitfield. Thank you, Mr. Waxman. And when Mr. Rush 
does arrive, we will give him an opportunity to make his 
opening statement.
    At this time I would like to recognize the chairman of the 
full committee, Mr. Upton, for opening statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    For years, pipeline safety has been a topic that enjoys 
bipartisan cooperation and produces very effective legislation. 
The last time this committee took up legislation on the 
subject, we were able to pass the bill under suspension on the 
House floor. And as the 2006 law expires, it is our 
responsibility to put forward meaningful legislation this 
summer that will improve pipeline safety and allow our pipeline 
infrastructure to remain a dynamic and efficient method for 
transporting vital energy supplies.
    The first step in the process is certainly today's broad 
survey of the world of pipeline safety. We have with us all the 
major stakeholders and experts, as well as the lead regulator 
on pipeline safety. The Pipeline and Hazardous Material Safety 
Administration is an effective enforcer of this Nation's 
pipeline regulations and laws, and I look forward to hearing 
how their processes, authorities, and resources could be 
enhanced with legislation in the future, as well as how the 
companies and interests represented at the witness table today 
believe that their industry could be rendered even safer.
    Pipelines are the safest method of transporting hazardous 
liquids and natural gas. The incident rate is extraordinarily 
small, but when things do go wrong, they can go wrong in a big 
way. That is for sure. And I do not have to look too far for an 
example of this, as 20,000 barrels of oil spilled out of a 
ruptured line into a tributary of the Kalamazoo River just one 
county outside of my district last year. I was aggressive in my 
efforts to get the spill cleaned up and the environment 
restored, but when it comes to policy changes, we cannot focus 
only on the response to a spill. We also have to focus on 
preventing pipeline safety failures before they happen.
    The overall strong safety record of hazardous liquid and 
natural gas pipelines can be marred by isolated failures that 
put human life, property, and the environment at risk. Pipeline 
safety is an issue that we all take very seriously. And I have 
let it be known that this committee is certain to move on a 
bipartisan reauthorization bill later this summer. Our goal 
should be to craft an effective bill that ensures another 
community doesn't experience a spill that affects their 
waterways or a massive explosion that levels a neighborhood.
    This hearing will give members a broad view of the status 
of the pipeline safety laws and regulations and will inform us 
of what might be the best path forward as we craft legislation. 
I look very forward to the discussion that we are going to host 
today and the ideas that will be proposed. I want to 
particularly thank the administrator for pipeline safety, Ms. 
Quarterman, for her graciousness for allowing us to have one 
panel instead of two as we are expecting about 3 hours of votes 
in about an hour. So we are able to hopefully get this 
adjourned before that starts because I am not sure how many 
people are going to have to come back after 3 o'clock.
    And I yield the balance of my time to Mr. Terry.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    For years, pipeline safety has been a topic that enjoys 
bipartisan cooperation and produces effective legislation. The 
last time this committee took up legislation on the subject, we 
were able to pass the bill under suspension on the House floor. 
As the 2006 law expires, it is our responsibility to put 
forward meaningful legislation this summer that will improve 
pipeline safety and allow our pipeline infrastructure to remain 
a dynamic and efficient method for transporting vital energy 
supplies.
    The first step in this process is today's broad survey of 
the world of pipeline safety. We have with us all the major 
stakeholders and experts as well as the lead regulator on 
pipeline safety. The Pipeline and Hazardous Material Safety 
Administration is an effective enforcer of this nation's 
pipeline regulations and laws. I look forward to hearing how 
their processes, authorities, and resources could be enhanced 
with legislation in the future as well as how the companies and 
interests represented at the witness table today believe their 
industry could be rendered safer.
    Pipelines are the safest method of transporting hazardous 
liquids and natural gas. The incidence rate is extraordinarily 
small, but when things do go wrong, they can go wrong in a very 
big way. I do not have to look too far for an example of this, 
as 20,000 barrels of oil spilled out of a ruptured line into a 
tributary of the Kalamazoo River just one county outside of my 
district. I was aggressive in my efforts to get the spill 
cleaned up and the environment restored. But when it comes to 
policy changes, we cannot focus only on the response to a 
spill--we must focus on preventing pipeline safety failures 
before they happen.
    The overall strong safety record of hazardous liquid and 
natural gas pipelines can be marred by isolated failures that 
put human life, property, and the environment at risk. Pipeline 
safety is an issue I take very seriously. I have let it be 
known this committee is certain to move on a bipartisan 
reauthorization bill this summer. Our goal should be to craft 
an effective bill that ensures another community doesn't 
experience a spill that affects their waterways or a massive 
explosion that levels a neighborhood.
    This hearing will give members a broad view on the status 
of pipeline safety laws and regulations and will inform us of 
what might be the best path forward as we craft legislation. I 
very much look forward to the discussion we will host today and 
the ideas that will be proposed and debated.

    Mr. Terry. Thank you, Mr. Chairman. I appreciate that 
opportunity to thank all of our witnesses for being here.
    And certainly just like our national interstate system, we 
want to design it so it is as safe as possible to travel on. 
Our pipeline system is critical to our energy infrastructure. 
And, as we know, as Mr. Upton said and Ranking Member Waxman 
mentioned is that sometimes there are problems. The explosion 
in San Bruno, California that killed, I think, eight people; 
incident in Arizona a couple of years ago. So as Fred said, 
when something goes bad, it can really have devastating effects 
on loss of life. So we need to get it as close to perfect as we 
can. So your testimony here will help do that.
    I do want to add to Mr. Waxman's comments about the 
TransCanadian pipeline. I think after 3 years of reviewing it 
and sitting on a foot-and-a-half environmental impact studies 
and supplementals that it is time for them to start action in 
the State Department and make a decision. So I don't think it 
was hasty or irresponsible at all. In fact, I think the 
irresponsible is the foot-dragging by our Agencies on several 
energy projects.
    With that I will yield back.
    Mr. Burgess. Would you yield to me?
    Mr. Terry. I will not yield back. I am going to yield to 
Mr. Burgess.
    Mr. Burgess. I appreciate you yielding me a generous amount 
of time.
    Mr. Chairman, I am going to ask unanimous consent to insert 
my entire statement into the record.
    But I live in an area of Texas where there is a complex and 
complicated network of natural gas pipelines above the Barnett 
Shale. I just want to point out that not all regulations need 
to be at the federal level. The consortium of mayors got 
together in my area and collaborated on a Pipeline Best 
Practices Guideline, and Mr. Chairman, I would like to ask 
unanimous consent to submit that for the record.
    Mr. Whitfield. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Burgess. And I will yield back Mr. Terry's time.
    [The prepared statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    Thank you, Mr. Chairman.
    This hearing is an important one for this committee to be 
having. Last year, we watched as other committees held hearing 
after hearing on pipeline safety, chipping away at the 
jurisdiction this committee should have been exerting from the 
start. Pipeline safety as a matter of energy policy is crucial 
to what we do here.
    Last year's events in Michigan and California were tragic 
reminders that safely upkeeping our nation's energy 
infrastructure is an ongoing process, and we must be diligent 
in protecting the lives of those around pipelines. It is true, 
in many areas of the country, including my backyard in north 
Texas, civilization is encroaching on pipelines just as 
pipelines are encroaching on civilization. Homes are being 
built closer and closer to infrastructure that was laid decades 
ago, in what used to be rural lands. Now, as the population has 
increased and urban density is forcing people to move further 
and further into the country, pipelines that were once miles 
from anywhere are suddenly right underneath residents' 
backyards.
    As people require more and more natural gas--one of the 
cleaner fuels on the market--more pipelines and infrastructure 
will be needed to meet the demand. What is not clear is how 
best to move forward with regulating this increased 
infrastructure. Some on this committee have called for new 
federal regulations. And that might be required, but we must 
fully review the conclusions from the investigations of past 
pipeline explosions and incidents to learn from them. Not all 
regulations must be at the federal level--a consortium of 
mayors in my district collaborated on a `Pipeline Best 
Practices' guideline.
    I am glad we are here today. We need to be looking into 
what is happening that has caused the isolated incidents over 
the past few years--is it a wild coincidence that these 
incidents have occurred within such a short span of each other, 
or is there a fundamental flaw in how we monitor and design our 
pipelines? We need firm answers to questions like these in 
order to best know how to move forward, balancing our need for 
increased, clean energy with the health and lives of those who 
live so close to energy infrastructure.
    With that, I yield back.

    Mr. Whitfield. You went over 16 seconds.
    Well, that concludes the opening statements except for Mr. 
Rush's. And I want to thank all the witnesses for being with us 
today and also we appreciate your flexibility in allowing us to 
change the time of the starting of the hearing.
    And with us today we have Ms. Cynthia Quarterman, who is 
the administrator of the Pipeline and Hazardous Materials 
Safety Administration at the Department of Transportation. We 
have Mr. Andy Black, who is president of the Association of Oil 
Pipe Lines and on Behalf of the American Petroleum Institute as 
well. We have Mr. Carl Weimer, who is the executive director of 
the Pipeline Safety Trust. We have Mr. Christopher Helms, who 
is executive vice president and group CEO of NiSource Gas 
Transmission and Storage, and also on behalf of the Interstate 
Natural Gas Association of America. We have Mr. Charles Dippo, 
who is vice president, Engineering Services and System 
Integrity for South Jersey Gas Company, and also on behalf of 
the American Gas Association. And we have Mr. Anthony Swift, 
who is the energy analyst for International Programs at the 
Natural Resources Defense Council.
    So thank you for being with us. All of you have a great 
deal of expertise in this area, which we know will be 
beneficial for us. And each one of you will be given 5 minutes 
for the purpose of an opening statement. And there is a little 
device there that will say green when it is time to go, yellow 
when you think about stopping, and red, I hope you might stop 
at that point. But we do look forward to your testimony. And at 
this time, Ms. Quarterman, I will recognize you for 5 minutes 
for your opening statement.

 STATEMENTS OF CYNTHIA L. QUARTERMAN, ADMINISTRATOR, PIPELINE 
AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION, U.S. DEPARTMENT 
 OF TRANSPORTATION; ANDREW J. BLACK, PRESIDENT, ASSOCIATION OF 
    OIL PIPE LINES, AND ON BEHALF OF THE AMERICAN PETROLEUM 
  INSTITUTE; CARL WEIMER, EXECUTIVE DIRECTOR, PIPELINE SAFETY 
TRUST; CHRISTOPHER A. HELMS, EXECUTIVE VICE PRESIDENT AND GROUP 
 CEO, NISOURCE GAS TRANSMISSION AND STORAGE, AND ON BEHALF OF 
 THE INTERSTATE NATURAL GAS ASSOCIATION OF AMERICA; CHARLES F. 
    DIPPO, VICE PRESIDENT, ENGINEERING SERVICES AND SYSTEM 
   INTEGRITY, SOUTH JERSEY GAS COMPANY, AND ON BEHALF OF THE 
 AMERICAN GAS ASSOCIATION; AND ANTHONY SWIFT, ENERGY ANALYST, 
    INTERNATIONAL PROGRAM, NATURAL RESOURCES DEFENSE COUNCIL

               STATEMENT OF CYNTHIA L. QUARTERMAN

    Ms. Quarterman. Thank you. Chairman Whitfield, Ranking 
Member Rush, members of the subcommittee, thank you for the 
opportunity to speak today to discuss the Pipeline and 
Hazardous Materials Safety Administration's oversight of 
America's vast network of energy pipelines.
    Safety is the number one priority of Secretary LaHood, 
myself, and the employees of PHMSA and we are strongly 
committed to reducing transportation risks to the public and 
environment. More than 2.5 million miles of pipelines across 
the Nation deliver energy to homes and businesses, connect 
communities, and support our way of life. PHMSA's role in 
ensuring the safety of each and every mile is vital. To get the 
job done, we develop and enforce regulations and maintain 
strong partnerships with States, who oversee most of the 
intrastate pipelines. Through strong regulations and integrity 
management programs, PHMSA has significantly reduced accidents 
and increased accountability for managing the risks of pipeline 
operations. Serious pipeline incidents have dropped by more 
than half over the past 20 years. However, we still have much 
work to do.
    In the wake of several recent serious pipeline incidents, 
PHMSA is taking a hard look at the Nation's pipelines. The 
pipeline infrastructure needs more attention to help ensure it 
will continue to meet the huge demand later generations will 
place on it to meet America's energy delivery needs.
    In April, Secretary LaHood and I developed an action plan 
requiring pipeline stakeholders to act, to be aggressive, and 
be transparent in charting a course to accelerate the 
identification, repair, rehabilitation, and replacement of 
high-risk pipeline infrastructure. As part of our action plan, 
we brought together everyone with a role in pipeline safety to 
engage in discussions. We have also met with government, 
industry executives, pipeline employees' representatives, 
States, and the public interest community to discuss the 
actions all pipelines can take to raise the safety bar.
    While we continue think about next steps, PHMSA looks 
forward to working with Congress on the reauthorization of its 
Pipeline Safety program. While previous reauthorizations have 
helped to advance pipeline safety by providing additional 
resources to better exercise the Department's enforcement 
authority, enhanced protection through integrity management 
requirements for distribution pipelines, and increased support 
for state pipeline safety agencies, we still need to do more. 
Pipeline safety could be greatly improved with the passage of 
reforms pushing stronger enforcement authority, expanded 
integrity management requirements beyond those areas where 
there are existing high-consequence areas, improved pipeline 
data collection, and by advancing safety in many other ways.
    Mr. Chairman, thank you for the opportunity to testify 
before this subcommittee and report on PHMSA's oversight role 
of pipelines and the opportunities that exist to strengthen 
oversight. I look forward to answering any questions you may 
have.
    [The prepared statement of Ms. Quarterman follows:]


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    Mr. Whitfield. Thank you, Ms. Quarterman. And at this time, 
Mr. Black, you are recognized for 5 minutes for your opening 
statement.

                  STATEMENT OF ANDREW J. BLACK

    Mr. Black. Thank you, Chairman Whitfield. I appreciate the 
opportunity to appear on behalf of AOPL and API.
    Pipelines have long been the safest way to move crude oil 
and refined petroleum products such as gasoline, diesel fuel, 
jet fuel, home heating oil, and propane. Pipelines are also the 
most reliable and efficient way to move these fuels, which 
American consumers and workers depend upon in our economy and 
our quality of life.
    The safety record of the liquid pipeline industry shows 
strong improvement over the past decade. There are 
significantly fewer pipeline accidents and less volume released 
of product than 10 years ago because of new laws and 
regulations, vigorous company actions, and improving 
technologies. Each of the major causes of pipeline accidents 
also showed marked decreases during this time period reflecting 
the successive strategies to manage risks better.
    Pipeline operators have every incentive to invest in 
safety. Most important is the potential for injury to members 
of the public, on employees, our contractors, and effects upon 
the environment. Operators can incur costly cleanups, repairs, 
litigations, and fines, and a pipeline may not be able to 
provide service to its customers if a facility needs to be shut 
down. Operators of liquid pipelines invest millions of dollars 
annually to maintain their pipelines to comply with safety laws 
and regulations. One survey of a group of members showed that 
$3.3 billion was spent on integrity management activities in 
just the past 6 years.
    These costs will only increase as integrity management 
tools become more expensive, more differentiated, and more 
effective at identifying issues for operators to address. These 
costs are ultimately borne by the shippers who pay for 
transportation services and the consumers of products that are 
shipped through the pipeline. Operators work hard to learn from 
pipeline incidents and share ideas and improvements for best 
practices. The industry has standing teams and workshops to 
assess integrity management issues, review incidents and near-
misses, analyze data, and make technically-based 
recommendations to industry leaders. Industry invests in R&D to 
develop new technologies and practices to confront pipeline 
challenges and pushes technology vendors to do the same.
    We continue to work very hard at the company and 
association level to achieve the goal of zero releases. 
Congress has provided PHMSA with broad authority to regulate 
pipeline safety. PHMSA is an aggressive regulator, conducting 
rigorous inspections and vigorously enforcing compliance with 
pipeline safety laws. PHMSA has the tools and uses them when 
necessary. Operators face a comprehensive set of requirements 
for construction, operation, and maintenance of a pipeline. 
Regulations cover everything from design standards to 
operational controls, qualification of personnel, public 
awareness, infrastructure and incident reporting, emergency 
response, and much more.
    While we do not yet have the final results in 
investigations in a recent high-profile pipeline accidents, it 
is important to note that existing laws and regulations already 
address the leading causes of pipeline failure, including 
corrosion, materials and equipment failures, and operations 
errors. If investigations unexpectedly identify any gaps, we 
are ready to work with you to address them.
    We were pleased to see the Senate Commerce Committee 
advance Pipeline Safety Reauthorization as 275, which passed 
the committee unanimously. The bill is a positive step forward, 
although we do not agree with every provision. My written 
testimony covers a number of recommendations.
    We call your attention to Section 3, which would 
essentially require PHMSA to prohibit one-call exemptions for 
state and local governments and their contractors. It is a 
great start. We urge this committee and the House to go further 
by eliminating still more exemptions for mechanized excavators. 
Third-party damage is less frequent today but it is still the 
leading cause of accidents that kill or injure people. In some 
cases, state laws requiring the use of 8-1-1, the national 
call-before-you-dig number, exempts state agencies, 
municipalities, or other entities such as railroads from 
requirements to use the one-call system. These exemptions 
create a gap in enforcement and safety. The pipeline does not 
care who hits it.
    PHMSA can close the gap by exercising one-call civil 
enforcement authority granted by Congress in 2006. PHMSA can 
induct enforcement proceedings for a one-call violation within 
the boundary of a State if the secretary has determined that 
the State's plan or enforcement is inadequate to protect 
safety. The draft PHMSA rulemaking on this issue is a great 
start but does not go far enough on ending these exemptions. We 
urge DOT to complete its rulemaking soon and urge Congress to 
require PHMSA to terminate these exemptions.
    We also applaud the provision in S. 275 to bring some of 
PHMSA's pipeline procedural rules up to par with those used by 
other regulatory agencies, including elsewhere at DOT. 
Requiring an impartial presiding officer to conduct hearings 
and allowing access to a hearing transcript are basic elements 
of due process we support. We encourage the Congress to go 
further by also requiring a separation of function of PHMSA 
staff to help ensure impartiality. Also, Congress should 
require PHMSA to allow timely hearings to review corrective 
action orders after they are issued.
    We are glad PHMSA may implement some of these safeguards 
administratively, but we know that they are reversible unless 
codified by Congress. We look forward to working with Congress, 
PHMSA, the Pipeline Safety Trust, and others to continue 
pipeline safety gains, and we authorize the pipeline safety 
laws. Thank you.
    [The prepared statement of Mr. Black follows:]


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    Mr. Whitfield. Thank you, Mr. Black. Mr. Weimer, you are 
recognized for 5 minutes.

                    STATEMENT OF CARL WEIMER

    Mr. Weimer. Good morning, Chairman Whitfield and Upton, and 
Ranking Member Waxman and members of the subcommittee. Thank 
you for inviting me to speak today on the important subject of 
pipeline safety.
    The Pipeline Safety Trust came into being after a pipeline 
disaster in Bellingham, Washington that occurred 12 years ago 
which left 3 young people dead, wiped out every living thing in 
a beautiful salmon stream, and caused millions of dollars of 
economic disruption. Borne from that tragedy and other 
tragedies in places like Edison, New Jersey; Carlsbad, New 
Mexico; and Walnut Creek, California, we have testified to 
Congress for years about the improvements needed in regulations 
to help prevent more disasters.
    For years we have talked about the need for more miles of 
pipelines to be inspected by smart pigs. We have pleaded for 
clear standards for leak detection and the placement of 
automated shutoff valves, closing the loopholes that allow some 
pipelines to remain unregulated, and for better information to 
be available so people know if they live near a large pipeline.
    So here we are again after new tragedies in Marshall, 
Michigan; San Bruno, California; and Allentown, Pennsylvania 
asking for the same things we have asked for at other hearings 
following previous tragedies. We are pleased to see some of our 
recommendations included in part of the legislation recently 
passed unanimously by the Senate Commerce Committee, and we 
hope this body will build on that legislation to provide an 
even stronger, more comprehensive bill. It is our sincere 
desire not to be back here again in the future saying the same 
things after yet another disaster.
    Pipeline safety should be an easy task. The pipeline 
industry, regulators, and citizen groups all agree that safety 
is Job 1. Every trade association has come out with some 
statement that the highest priority is no deaths, no injuries, 
and zero incidents. So if we all agree that zero incidents is 
the goal, then let us look at what changes in the rules can get 
us to zero.
    Clearly, providing PHMSA and the States with more funding 
and personnel so they can better inspect industry efforts and 
analyze safety needs should move us towards zero incidents, so 
we all should support that. Since integrity management 
requirements were passed nearly 10 years ago, more than 34,000 
flaws were found in pipelines and repaired, reducing the 
possibilities of many failures. Since 75 percent of all the 
deaths caused by the failures of transmission pipelines have 
occurred in areas that fall outside of the current integrity 
management requirements and only 7 percent of the gas pipelines 
and only 44 percent of liquid pipelines fall under these 
inspection requirements. It is clear we could reduce incidents 
by requiring integrity management inspections on all miles of 
these pipelines.
    We are glad that INGAA in their recently-released new set 
of guiding principles commits to ``applying integrity 
management principles on a system-wide basis.'' Likewise, any 
pipelines near people should be required to operate in such a 
way that prevents failures. Unfortunately, with the rapid 
expansion of new shale gas drilling in more populated areas, 
there are now hundreds of thousands of miles of gas gathering 
lines that are under-regulated or not regulated at all. Many of 
these lines are the same size and pressure as transmission 
pipelines. Clearly, if our priority is safety, then these 
gathering lines need to fall under the same safety regulations 
as other similar pipelines.
    If zero is our goal, then state agencies need to continue 
to be pushed to move to improve their pipeline damage 
prevention laws, and the efforts of state pipeline safety 
agencies need to be clearly evaluated and those evaluations 
shared with the public. If safety is our highest priority, then 
the disconnect that exists between the agencies that cite new 
pipelines and PHMSA, the Agency in charge of pipeline safety, 
needs to be corrected. PHMSA needs to have the authority and 
the resources necessary to engage in safety reviews as these 
pipelines are planned and to inspect them thoroughly as they 
are going into the ground.
    And if getting to zero incidents is really our priority, 
then local governments who have zoning and permitting authority 
regarding land uses near pipelines need to be engaged actively 
in these pipeline safety discussions since more and more 
development is encroaching near these big pipelines.
    NTSB's recommendation that companies can clearly document 
that the operating pressure they run their transmission 
pipelines at is based on real knowledge of what is in the 
ground needs to be adopted. Also requirements for excess flow 
valve installation on appropriate multi-family and commercial 
applications needs to be moved forward.
    I see my time is about up so let me close by saying that 
there are many things that clearly can be done to make 
pipelines safer. We have outlined many of those specific ideas 
in our written testimony. Many of the leaks, spills, and 
injuries and deaths that are still occurring are preventable. 
Instead of just saying getting to zero is our highest priority, 
we all need to start doing things that will actually get us 
there. You have the opportunity this year with this legislation 
to help guide us all towards zero incidents. We hope you seize 
that opportunity and help hold us all to our fine talk.
    Thank you.
    [The prepared statement of Mr. Weimer follows:]


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    Mr. Whitfield. Thank you. Mr. Helms, you are recognized for 
5 minutes.

               STATEMENT OF CHRISTOPHER A. HELMS

    Mr. Helms. Thank you, Chairman Whitfield, Ranking Member 
Rush, and members of the committee.
    My name is Chris Helms. I am CEO of NiSource Gas 
Transmission and Storage and chairman of the INGAA Board 
Taskforce on Pipeline Safety. NiSource operates more than 
15,000 miles of natural gas transmission pipelines extending 
from the Gulf Coast to the Northeast.
    Today, I am testifying on behalf of INGAA, the Interstate 
Natural Gas Association of America. INGAA represents the 
Nation's interstate natural gas transmission pipeline industry, 
and as seen on Slide #1, our members operate a 200,000-mile 
network of large-diameter pipelines that transport natural gas 
throughout the Nation.
    [Slide shown.]
    I would like to state at the outset that while the safety 
record of the natural gas transmission system is very strong, 
we recognize that continuous improvement is imperative. We want 
to work with you and other stakeholders to achieve our primary 
goal of zero pipeline incidents. Demand for natural gas is 
growing, and as a result, maintaining the public trust in 
pipeline safety is critical.
    [Slide shown.]
    Slide 2 shows the interstate natural gas transmission 
pipelines that have been approved for construction by the FDRC 
over the past decade. Due to the growing demand for domestic 
shale gas, gas pipeline infrastructure has expanded 
significantly and will likely continue to grow. Ensuring the 
safe and reliable operation of these systems will remain 
critical and is the highest priority for this industry.
    As part of the Pipeline Safety Improvement Act of 2002, 
natural gas transmission pipeline operators were required to 
implement an integrity management program. Integrity management 
is a strategic risk-based approach that focuses on identifying 
and mitigating risk in populated areas. The program requires 
continual pipeline assessments and the repair and remediation 
of any potential safety problems that are found.
    The vast majority of baseline assessments under the program 
are nearing completion. Consistent with the schedule 
established by Congress, while only 4.5 percent of INGAA member 
pipeline members are located in populated areas covered under 
the program, baseline assessments have been completed on more 
than 50 percent of the pipeline miles to date.
    With the first round of assessments almost complete, we 
believe now is an ideal time to reflect upon the effectiveness 
of this program. Last year, the INGAA Board established a 
senior-level task force and then adopted clear guiding 
principles to define and lead our industry to improve safety 
performance. Our 5-point principles are outlined in Slide 3 as 
follows:
    Our goal is zero incidents, a perfect record of safety and 
reliability for the national pipeline system. We will continue 
to work every day towards this goal. We are committed to safety 
culture as a critical dimension to continuously improving our 
industry's performance. Third, we will be relentless in our 
pursuit of improving by learning from the past and anticipating 
the future. Fourth, we are committed to applying integrity-
management principles on a system-wide basis, as Mr. Weimer 
said. And last, we will engage our stakeholders from the local 
community to the national level so they can understand and 
participate in reducing risk.
    To translate these principles into action, the taskforce 
has commissioned an initiative we call ``Integrity Management 
Continuous Improvement.'' Our objective is to assess our 
performance, identify lessons learned, and target areas in need 
of improvement. Action plans have been developed and teams are 
already working in key areas to move us towards achieving our 
goal of zero incidents.
    In light of recent pipeline incidents, it is important to 
reassess our infrastructure and better characterize the 
conditions that contribute to pipeline failures. A pipeline 
fails when its conditions deteriorate or service environment 
changes to a point where the pipeline is no longer fit for 
service. To achieve zero incidents, our focus must remain on 
that standard. Any pipeline not fit for service, regardless of 
age, should be repaired, replaced, or retired. Older pipelines 
can remain fit for service if operating conditions are 
controlled and the pipeline is properly maintained. On the 
other hand, even the newest pipelines can be susceptible to 
failure due to threats like excavation damage or outside 
forces. Age is an important consideration but is only one 
indicator of a pipeline's fitness for service.
    Pipeline safety is a shared responsibility which requires 
close cooperation among all stakeholders. We are actively 
engaged in critical call-before-you-dig programs, and as you 
can see this morning, I am wearing the 8-1-1 call-before-you-
dig pin. We work with local governments to educate them about 
development around existing pipelines. We are working with 
first responders to train emergency personnel on how to prevent 
and respond to natural gas pipeline emergencies. Our efforts to 
engage our stakeholders are numerous and this interaction is 
critical to achieving our goal of zero incidents.
    In drafting a reauthorization bill, INGAA believes that 
legislation recently approved by the Senate Commerce Committee 
provides a good framework to follow.
    I see that my time is about up, so Mr. Chairman, what I 
would like to say in closing is we hope that Congress will 
complete reauthorization of a bill this year and view the 
progress being made in that regard as encouraging. Thank you 
for the opportunity to testify today and I look forward to your 
questions.
    [The prepared statement of Mr. Helms follows:]


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    Mr. Whitfield. Thank you. Mr. Dippo, you are recognized for 
5 minutes.

                 STATEMENT OF CHARLES F. DIPPO

    Mr. Dippo. Good morning, Mr. Chairman and members of the 
Committee. I am Charles Dippo, Vice President of South Jersey 
Gas, and Chairman of the American Gas Association Operation 
Section. I am here testifying today on behalf of AGA, which 
represents 200 local energy companies that deliver clean 
natural gas to more than 64 million customers throughout the 
United States.
    Industry has demonstrated it can increase the delivery of 
natural gas while continuously improving safety. Data from 
PHMSA shows serious incidents and leaks have been reduced by 
nearly 50 percent over the last 20 years but clearly more needs 
to be done. The tragic incident in San Bruno reminds us that 
one accident is too many. The NTSB has not issued a final 
report on the San Bruno incident, but the industry is already 
taking away important lessons from the information that has 
been produced thus far in the extensive investigation.
    The factual reports show that the event appears to be an 
isolated incident with no evidence of national system safety 
problems. Nevertheless, pipeline operators are assessing their 
systems to determine if the circumstances encountered in San 
Bruno bear any similarity to their operations.
    The pipeline industry leadership has joined Transportation 
Secretary LaHood in his call to action to repair, replace, or 
rehabilitate the highest-risk infrastructure and to raise the 
bar on pipeline safety. How do we raise the bar on pipeline 
safety? First, we must keep our focus on key initiatives that 
are showing success. This includes distribution and 
transmission integrity management, control room management, 
public awareness, excavation damage prevention, and voluntary 
initiatives such as AGA's Best Practices program.
    Second, we have an opportunity to enhance safety through 
better excavation damage prevention programs, establishing a 
data quality committee, reducing hurdles to implementing new 
technology, adopting the latest consensus standards, and 
enhancing pipeline safety legislation. One key safety 
initiative is distribution integrity management. This 
comprehensive regulation provides an added layer of protection 
to the already-strong safety programs executed by distribution 
companies. Operators are given until August 2011 to write and 
being implementation of their individual risk-based programs 
and are already aggressively implementing this rule.
    Excess flow valves, EFVs, have another added layer of 
safety. AGA supported the 2006 congressional mandate and most 
operators were voluntarily installing EFVs well before the 
congressional deadline. However, due to the inherent 
uncertainties and complexities associated with service lines 
for multiple-family dwellings, commercial and industrial 
customers, it is inadvisable to attempt mandatory installation 
of EFVs beyond single-family homes. PHMSA should be given 
adequate time to finish its technical analysis and complete the 
final rule-making process.
    Excavation damage represents the single-greatest threat to 
gas distribution, safety, reliability, and integrity. AGA 
supports legislation that will require a state one-call program 
to have appropriate participation by all underground operators 
and excavators, including government entities; to have flexible 
and effective enforcement; and prohibit exemption of 
municipalities, state agencies, or their contractors from the 
one-call requirements.
    AGA also believes pipeline safety can be improved through 
an independent review and analysis of the data collected by 
DOT. AGA recommends the creation of a data quality team that 
mirrors PHMSA's technical advisory committees. This team would 
analyze and improve upon the data collected by DOT, identify 
areas where the data tells us there is an opportunity to 
improve pipeline safety, and to communicate consistent messages 
about what the data is telling us.
    AGA supports continued funding of research, development, 
and deployment of new technologies, as well as the refinement 
of current technologies that are essential to improving 
pipeline safety. We recommend that emphasis be placed on the 
deployment of new technologies and the reduction of regulatory 
barriers operators currently face when attempting to implement 
new technologies.
    The industry is presently restricted by federal pipeline 
safety regulations that require operators to follow obsolete 
standards as they relate to pipeline safety. AGA suggests that 
Congress consider legislation to require DOT to codify within 2 
years the most recent addition of a standard that DOT has 
adopted into the pipeline safety code.
    Finally, it has been suggested that the transmission 
integrity management program be changed to eliminate high-
consequence areas, thus requiring integrity management 
assessments on all transmission pipelines. AGA believes this 
would be contrary to the intent Congress had for the program, 
which was to focus resources on areas where an accident could 
do the most damage.
    AGA believes it is reasonable for Congress to direct DOT to 
evaluate the effectiveness of transmission integrity management 
program within 2 years of the completion of the baseline 
assessments. This study could include evaluations of maximal 
allowable operating pressure, potential expansion of high-
consequence areas, installation of remote or automatic shutoff 
valves, and expansion to areas of seismic activity.
    In conclusion, the natural gas utility industry has a 
strong safety record and we are committed to working with all 
stakeholders to improve. To that end, we applaud this 
committee's focus on moving pipeline safety reauthorization 
forward. Passage of this important bill this year will help us 
all achieve a common goal: to enhance the safe delivery of this 
vital energy resource.
    Thank you.
    [The prepared statement of Mr. Dippo follows:]


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    Mr. Whitfield. Thank you, Mr. Dippo. Mr. Swift, you are 
recognized for 5 minutes.

                   STATEMENT OF ANTHONY SWIFT

    Mr. Swift. Thank you, Chairman Whitfield, Ranking Member 
Rush, and members of the committee. I am a policy analyst for 
Natural Resources Defense Council. NRDC is a national nonprofit 
organization dedicated to protecting public health and the 
environment. As a personal note, coming from West Texas in a 
family with 4 generations in the oil and gas industry, I value 
the opportunity that allows me to participate in the critical 
process and ensures the industry's infrastructure is held to 
the highest standards of safety.
    Over the last few years, the U.S. hazardous liquid pipeline 
system has been used to transport a substance called diluted 
bitumen from the tar sands region of Canada. By itself, bitumen 
is virtually solid at room temperature. To move it through a 
pipeline, producers must dilute it with light, highly volatile 
natural gas liquids. The thick, abrasive mixture called diluted 
bitumen is then pumped through pipelines at high pressure 
generating enough friction to reach temperatures of up to 150 
degrees. Over the last decade, imports of diluted bitumen have 
increased six-fold, yet regulators haven't moved to assess its 
risk, including both the potential for increased spill 
frequency, as well as greater safety risks when those spills 
occur.
    The U.S. pipeline system may already be showing signs of 
strain. For example, pipelines in Midwestern States, which have 
the longest history of transporting Canadian tar sands crude 
has filled nearly 3 times more crude per mile than the national 
average over the last 4 years.
    Enbridge transports the majority of Canadian diluted 
bitumen to the United States. In 2010, its Lakehead System had 
over a dozen spills, accounting for more than half of all crude 
oil spilled in the United States that year. Meanwhile, 
TransCanada's Keystone pipeline, one of the first pipelines 
dedicated to move tar sands crude from Canada to the United 
States, has had 12 leaks in less than 12 months of operation, 
the largest of which was approximately 21,000 gallons. Keystone 
is the newest liquid pipeline system to ever be deemed by PHMSA 
an immediate threat to life, property, and the environment.
    During a spill, natural gas liquids and diluted bitumen may 
increase the risk of explosion and exposure to toxic vapors. As 
the 840,000 gallons spilled into Kalamazoo appears to have 
confirmed, in a spill, diluted bitumen behaves differently than 
conventional crude requiring different, more expensive, and 
time-consuming cleanup methods than conventional crude oil 
spills. These are early warning signs that present a compelling 
case that more study is needed on the risks of diluted bitumen.
    Building TransCanada's Keystone XL, a high-pressure 
pipeline that would move up to 830,000 barrels per day of hot, 
corrosive, diluted bitumen through the heart of the Ogallala 
Aquifer creates hazards that a conventional crude oil pipeline 
does not. The Ogallala Aquifer is a critical source of fresh 
water for the United States, provides 30 percent of our 
irrigation water and drinking water for millions of Americans. 
A spill in the deepest part of that aquifer in the Nebraska 
Sandhills could be a disaster. Given the limits of leak-
detection technology, which on a pipeline like Keystone XL 
could allow a leak of hundreds of thousands of gallons a day to 
go unnoticed, the worst-case scenario is simply one we cannot 
afford.
    NRDC recommends the following actions. First, Congress 
should require PHMSA to conduct a detailed study of diluted 
bitumen. This study should include both the risks of increased 
spill frequency, as well as unique hazards that such spills may 
pose to public safety and the environment.
    Second, PHMSA should be actively engaged in all stages of 
major pipeline infrastructure development. This includes 
issuing comments during environmental review for significant 
pipeline projects such as the proposed Keystone XL pipeline. It 
should be noted that it is the quality and not the time spent 
conducting environmental reviews that ensures the safety of new 
projects.
    Finally, Congress should direct PHMSA to develop necessary 
regulations to protect our major fresh water resources like the 
Ogallala Aquifer from pipeline spills. Under current pipeline 
safety regulations, aquifers like the Ogallala receive the 
lowest level of federal oversight. During the Gulf spill, we 
witnessed the sad consequences that come of allowing an 
accident-prone company to replace expensive but prudent safety 
measures with reckless optimism. Let us not court a similar 
disaster in the deepest waters of our Nation's greatest 
aquifer.
    Once again, NRDC thanks you for the opportunity to present 
its views and I would be pleased to answer any questions you 
may have.
    [The prepared statement of Mr. Swift follows:]


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    Mr. Whitfield. Mr. Swift, thanks very much.
    And at this time, I would like to recognize the ranking 
member, Mr. Rush, for his opening statement.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman, and I want to 
thank all of the panelists for being here today.
    Mr. Chairman, I find it curious that this subcommittee is 
holding the hearing on pipeline safety after the majority 
pushed through a bill to cut out the review period for public 
and agency input in order to influence the administration to 
hastily come to a decision regarding the Keystone XL pipeline 
on behalf of the TransCanada Corporation. Yes, this is the same 
TransCanada Corporation who built the original Keystone 
pipeline that was temporarily shut down following two leaks on 
a line that had only been in operation for less than 12 months.
    I might seriously question on which side the majority falls 
when it comes to actually ensuring pipeline safety versus 
accommodating the interests of corporate entities. So forgive 
me if it seems like this hearing is a day late and a dollar 
short when it comes to this subcommittee actually putting into 
practice whatever lessons we may learn here today. And it 
appears doubtful that the majority will allow safety concerns 
to interfere in the weighing of industry moving forward at all 
costs.
    Let it be said I am not opposed to industry but industry's 
pathway forward must not be oiled by this subcommittee. With 
that being said, I still believe that this hearing is warranted 
and necessary and I am pleased to have heard some of the 
testimony from our distinguished experts and our witnesses on 
the panel.
    Mr. Chairman, in the past, pipeline safety has been an 
issue that this subcommittee has addressed in a bipartisan 
fashion. And despite yesterday's markup forcing a hasty 
decision on the Keystone XL pipeline, I hope that we will 
continue in that tradition in this session as well. In light of 
recent pipeline accidents, including Keystone 1 leaks, the PG&E 
explosion in San Bruno, California, the 2 Enbridge fails in 
Marshall, Michigan and Romeo, Illinois and the Allentown gas 
line explosion in Pennsylvania, it is extremely important that 
we learn from these cases so lessons can be applied to our 
overall pipeline safety standards.
    I look forward to this hearing and I look forward to asking 
questions of these witnesses. And I look forward to asking 
questions of the Pipeline Hazardous Materials and Safety 
Administration on their updated plans for safety transporting 
tar sands crude from Canada through the heart of the United 
States, including my State. These tar sands contain bitumen, a 
heavy, tar-like substance which, compared to conventional 
crude, has higher sulfur content, higher chloride salt content, 
and higher quantities of emergent particles, all of which 
increases the potential for corrosion.
    I will also like to hear and ask questions on how PHMSA 
plans to address the issue of companies using substandard steel 
for their pipelines that do not comply with industry standards 
and in many cases leads to stretching and leakage. At a time 
when Congress and the administration is considering approval of 
one of the largest new pipeline projects in recent history, the 
Keystone XL, which will carry Canada tar sands through the 
middle of the country, it is imperative that we examine these 
important issues and assure the American people that we have an 
effective and comprehensive plan in place to both prevent 
future spills as well as to deal with accidents once they take 
place.
    So, Mr. Chairman, I look forward to the questioning part of 
this hearing, and I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Rush. And I will recognize 
myself for the purpose of 5 minutes of questions.
    Ms. Quarterman, and in fact for all the panel members, all 
of you, I am sure, are familiar with the Senate bill that has 
been working on over there. Would each one of you give me your 
succinct analysis of one or two of the major flaws of that 
legislation or areas that should have been covered that is not 
in the bill? Ms. Quarterman?
    Ms. Quarterman. Yes, thank you. The administration has not 
had an opportunity to come forward with an administration 
position on that particular bill. We have in my testimony today 
several administration proposals that the administration has 
been supportive of in the past. I don't know of anything in 
that bill that is necessarily a showstopper from our vantage 
point.
    Mr. Whitfield. But is there any major item that they failed 
to cover?
    Ms. Quarterman. I don't believe there is.
    Mr. Whitfield. Mr. Black?
    Mr. Black. No major flaws, Chairman Whitfield. AOPL and API 
supported the bill moving out of the committee. We hope the 
Senate will move it without change and then work with the 
Congress as it considers its bill. We would like the Congress 
to go further on damage prevention eliminating more----
    Mr. Whitfield. On damage prevention?
    Mr. Black. Damage prevention, exemptions from the one-call 
system in the States. We believe PHMSA should use its authority 
and Congress should encourage PHMSA to do it or direct it to 
eliminate more mechanized exemptions than S-275 does now. They 
added an amendment on due process protections. We think they 
should go a little further on hearings after issuance of a 
corrective action order and requiring a separation of functions 
in PHMSA's staff.
    And one more issue that is in the testimony on leak 
detection, there is a requirement for a study on leak detection 
technologies which is very complex. We think that is fine. We 
know PHMSA recently studied this I think in 2007. But there is 
an assumption that PHMSA must do a rulemaking even before 
knowing what the study suggested. We think that should be 
changed to permissive authority to do the rulemaking on leak 
detection, first a study and figure out if there something more 
that should be done.
    Mr. Whitfield. OK. Thank you. Mr. Weimer?
    Mr. Weimer. Yes, we are pretty pleased with Senate Bill 
275. It is comprehensive. It covers a number of the issues we 
have. There are a few things that we think could be done 
better.
    There is a need for fees for inspections of new pipelines 
and the bill addresses that a little bit but it only applies to 
very large pipelines. We think it should be expanded. I think 
the bill that came out from the administration asked for such 
fees. We also think there needs to be fees for special permits. 
That is an area where PHMSA gets spread too thin trying to deal 
with lots of special permits.
    And the other area that we really think needs to be 
expanded is regulation of natural gas gathering lines. Like I 
said in my testimony, there is hundreds of thousands of miles 
of those going into places like Texas and Pennsylvania and New 
York, and a lot of those are unregulated or very much under-
regulated. So that is an area that needs to be looked at.
    Mr. Helms. Yes, we believe the bill is a good bill and it 
has been a bill that has really brought in a lot of the 
stakeholders into the discussion, Mr. Chairman. And it is kind 
of interesting you are now hearing the administration, the oil 
pipeline guys, the Public Safety Trust and interstate natural 
gas industry agree that this is a good way for us to go 
forward.
    In pages 8 through 12 of my testimony, we have some 
specific recommendations, and I would probably characterize 
them more as tweaks as anything else.
    Mr. Whitfield. OK.
    Mr. Helms. I think we have a good start.
    Mr. Whitfield. Thank you. Mr. Dippo?
    Mr. Dippo. Yes, likewise. The American Gas Association also 
believes that this is a good bill for our members. It was a 
good bipartisan product. A few areas we might recommend some 
tweaking or changes to the section on maximum allowable 
operating pressures seem to be a bit rushed. We would suggest 
possibly more time to review how that is written.
    And the other thing, that seismicity, that section in there 
is actually already being addressed by operators on Subpart O, 
Part 192, which requires operators' integrity management 
operations under the preventive and mitigative measures to 
consider outside forces. So I am not really sure why that came 
up all of a sudden but we feel that is already being addressed 
by its members through the existing regulation.
    Mr. Whitfield. Mr. Swift?
    Mr. Swift. The NRDC defers to the Pipeline Safety Trust on 
most issues in the Lautenberg bill, but we are very pleased to 
see that there was a study required of the safety issues and 
regulatory sufficiency for tar sands crude. We would like to 
see language that gives PHMSA the authority to act on what they 
find in that study from a regulatory perspective.
    Mr. Whitfield. And Ms. Quarterman, what is the budget for 
PHMSA?
    Ms. Quarterman. For the pipeline program?
    Mr. Whitfield. Yes, the pipeline program.
    Ms. Quarterman. I don't know the exact number, around $200 
million.
    Mr. Whitfield. How much?
    Ms. Quarterman. Around $200 million.
    Mr. Whitfield. 200, OK. I see my time has expired. Mr. 
Rush, you are recognized for 5 minutes.
    Mr. Rush. Thank you. Ms. Quarterman, in my opening 
statement I referenced the fact that just yesterday this 
subcommittee green-lighted a bill that will short-circuit the 
review process and force the administration to hastily come to 
a decision on the Keystone XL pipeline by November 1. Your 
Agency suggests recently shutting down Keystone 1 pipeline 
temporarily due to leaks from a pipeline that has been in 
operation for only 11 months. Can you discuss with the 
committee the events surrounding the temporary shutdown and 
eventual restricted opening of the Keystone 1 pipeline? And why 
did PHMSA initially make the decision to shut down the pipeline 
and then reverse itself and open it up with restrictions?
    Ms. Quarterman. This is fairly common practice in the way 
we operate on the enforcement side of things. We found a 
condition that had occurred on 2 occasions with respect to the 
Keystone pipeline, both on May the 7th and May the 9th where 
there was a leak from a similar component. And in those 
instances where we think it could be a systematic problem, the 
regional director puts forward an order telling them they need 
to shut down and come forward with a plan on how they plan to 
fix this, not only these 2 instances but across the board.
    In this instance they came forward with a plan very quickly 
and that is why they got the restart plan I think a day or two 
after that.
    Mr. Rush. What were the conditions?
    Ms. Quarterman. I will have to get you the details of what 
the leak related to. I think it was in a pump station. There 
was a stripping of a valve or something like that.
    Mr. Rush. Is it unusual for a pipeline that has only been 
in operation for less than a year to have these problems? And 
have you ever issued a corrective order for a pipeline that has 
been in operation for less than a year?
    Ms. Quarterman. I am going to have to go back and look at 
our records to answer that question.
    Mr. Rush. OK. Does PHMSA have an updated and comprehensive 
plan for transporting diluted bitumen from the Canadian tar 
sands through the heart of the country as the Keystone pipeline 
would do?
    Ms. Quarterman. There is a requirement in the Senate bill 
that was passed out, I believe, of committee that would require 
PHMSA to do just such a study. We have not done a study on that 
in the past. If that were to be part of the final bill that 
came out of this committee and was passed into law, we would 
certainly be pleased to do that.
    Mr. Rush. All right. Mr. Weimer, the first Keystone 
pipeline, which brings Canadian tar sands to refineries in 
Illinois and Oklahoma was predicted to spill no more than once 
every 7 years. However, in just 1 year of operation it has 
reported 12 separate oil spills through the NRC, the National 
Response Center. You are considered an expert on pipeline 
safety and your work on pipeline safety issues is known far and 
wide. And as members in this subcommittee debate the importance 
of streamlining the permit process while also taking into 
account safety and environmental concerns, do you advise that 
we err on the side of safety or expediency? Is there a way to 
do both? And how should one member who is not necessarily 
opposed to the pipeline who is interested in creating more jobs 
because I represent a district where there is high 
unemployment, how should I approach this? From an expedited way 
or should I approach this from a public safety way? Give me 
some insight in how you would handle this situation.
    Mr. Weimer. Right. Thank you for the question. The Pipeline 
Safety Trust always embraces a precautionary principle that 
tries to answer as many of the questions as possible before you 
move forward. You know, Keystone 1 has had 12 spills in the 
last year, which is a lot of spills, although they were all 
fairly minor, all within kind of pump station areas. We have 
reviewed the corrective action order from PHMSA and think it 
was appropriate and even their backing off, you know, a few 
days later was appropriate because the company had done what 
they needed to address that system.
    As far as permitting for Keystone 2, you know, we have 
joined with a number of national groups questioning--done 
research and have questioned things about the corrosiveness and 
the abrasiveness of the material moving through those pipelines 
from the tar sands and we have asked those questions of PHMSA. 
And to date, just as Ms. Quarterman said, they have not done 
that study so we don't know the answers to those questions. So 
using a precautionary principle, we would prefer to wait until 
those questions are answered before that pipeline moves 
forward.
    And then we have also heard from EPA just last week that 
they also didn't know, you know, the toxicity of some of the 
material used to dilute that bitumen. So there is a number of 
unanswered questions and, you know, it is certainly up to the 
policymakers to decide whether they are big enough questions to 
allow something like that to move forward or not.
    Mr. Rush. Thank you.
    Mr. Whitfield. Mr. Upton, you are recognized for 5 minutes.
    Mr. Upton. Well, thank you all. And again, I want to 
appreciate the administrator serving on one panel, particularly 
with these votes coming in.
    I want to ask a question of each of you, and again this 
goes back to the personal experience of what happened in 
Michigan last year. Sadly, we had a pipeline break, a pretty 
large spill, and one of the issues that came from that was as 
we examined the existing legislation, I want to say that they 
were supposed to report in a timely manner. And there was some 
thought that perhaps the notice should have been given quite a 
bit earlier. And had it been within an hour or so of when it 
was first discovered, perhaps--and again there was great 
response by the first responders and they did a remarkable 
job--but had they had a little more time, they would have been 
able to kink the damage and do a much better job long-term.
    It is my understanding that the Senate legislation does not 
have a specific time frame as to when it has to be reported to 
the national number. From what happened last year, our former 
colleague, Mr. Schauer, who represented that district 
introduced legislation that was 1 hour, I believe, from the 
time that it had to be reported. That is not in the Senate bill 
as I understand it. What are your thoughts as to tidying up so 
that you had to report it nationally within 1 hour so that 
they, in fact, could be able to get the first responders there 
on the scene? And maybe we will start with the administrator 
and we will go down the line. And sadly that is the first 
buzzer of votes so I will make this my only question so I can 
let other members speak before 3 o'clock.
    Ms. Quarterman. Well, I can't speak to the specifics of 
that particular instant, but as to the broader question of the 
timeliness of notification, that is one that is obviously of 
great interest to us. And we have historically required 
companies to respond within an hour or two of notification. I 
believe that is in one of our safety advisories. And we would 
be happy to reconsider if that is not long enough or too long. 
We would be happy to talk about that further, but certainly we 
believe that when there is an incident, the emergency 
responders and we need to know as soon as possible.
    Mr. Upton. The national office is maintained 24/7, right? 
So if a call comes in at 3:00 in the morning, somebody is there 
to physically answer the phone, is that right?
    Ms. Quarterman. Not officially but in reality, yes, that is 
the case.
    Mr. Upton. Mr. Black?
    Mr. Black. Operators are supposed to notify the National 
Response Center within the timelines the administrator said. I 
understand that in the Marshall, Michigan accident, part of the 
investigation is what the company went through to identify that 
there is a leak. We don't have a problem with the existing 
requirements. We would ask for the committee's help with the 
National Response Center.
    There are 2 problems with the notification system that 
cause an inherent tendency to just make sure you have got it 
right. One is it is difficult to revise the estimate of a 
release once you make it, and you have to make it right there 
very quickly. So a company wants to make sure they get it 
right.
    And second, you have got to quantify it very specifically. 
We would like to be able to report a general range of a liquid 
release. And that might remove some of the hesitancies. I have 
not heard that in the Marshall, Michigan accident, but if we 
could work to improve NRC, National Response Center, 
regulations there, I think we would improve incident 
notifications.
    Mr. Weimer. We think response to the National Response 
Center as fast as possible is good. I don't have a time in mind 
clearly. I think what most companies are doing is probably 
adequate. Another important question is how quick either the 
NRC or the operator themselves contact the actual local first 
responders, because those are the people that need to hit the 
ground.
    I think a bigger question that this brings to from the 
Michigan spill was why the leak detection system on that 
pipeline didn't work and it leaked all night long that delayed 
the response to anybody for 10 or 12 hours.
    Mr. Helms. There is a bit of a difference between liquids 
pipelines and gas pipelines. Our pipes will either leak or they 
will rupture and that can be detected through normal 
monitoring. So there is a little bit difference. I would defer 
to my colleagues and say that as soon as possible is a pretty 
good standard. We are judged by that. If we have an incident, 
our regulators come back in and they do review our control room 
procedures to determine whether we have been responsive or not. 
In most cases I think we have found to be.
    The issue for us, obviously, is having an appropriate 
supervisory control and data acquisition system that identifies 
the place where the incident may happen. And so we can notify 
local first responders as well as our own personnel to respond 
to it. I am very proud that our company has put together a fire 
school in southwestern Pennsylvania, and we have been training 
local firefighters across Pennsylvania to be able to respond to 
such emergencies.
    Mr. Upton. I know my time has expired so just go yes or no 
for the last two. One hour, yes or no?
    Mr. Dippo. No. As distribution operators, I would just say 
that we respond to distribution leaks on a 24/7 basis, 365 days 
a year and our concern would be that incidents or that they 
would overwhelm the NRC center in terms of with calls that are 
not true emergencies.
    Mr. Swift. NRDC agrees with PST that as soon as possible.
    Mr. Upton. Thank you. Yield back.
    Mr. Whitfield. Mr. Waxman, you are recognized for 5 
minutes.
    Mr. Waxman. Thank you, Mr. Chairman.
    And Ms. Quarterman, we have seen the terrible string of 
pipeline accidents over the past year. Is this just a lot of 
bad luck or is our pipeline safety system under substantial 
stress?
    Ms. Quarterman. I wish I could say one or the other. I 
mean, I certainly have been greatly concerned by the incidents 
that have occurred. The fact that all 3 of the incidents have 
occurred in every part of the pipeline sector distribution 
transmission and hazardous liquids is of concern and the fact 
that they have all been in high-consequence areas is one of 
great concern to me, which is why we have been already 
undertaking many of the initiatives that are a part of this 
legislative proposal on the Senate side.
    Mr. Waxman. Let me move through some other questions for 
you.
    Ms. Quarterman. Sure.
    Mr. Waxman. Does your Agency have the resources it needs to 
ensure pipeline safety, and if you had additional resources 
would we see fewer explosions and spills?
    Ms. Quarterman. We have good resources as part of the 
proposal the administration put forward in 2010. We did request 
additional resources and we could certainly use them.
    Mr. Waxman. I think your Agency is stretched pretty thin. I 
believe you are directly responsible for about 500,000 miles of 
pipeline but you have only 136 employees responsible for 
inspection and enforcement. That is over 3,500 miles of 
pipeline per inspector.
    Mr. Weimer's written testimony identified numerous critical 
areas where PHMSA needs to issue rules or take other actions. 
These activities also require resources. In the testimony Mr. 
Weimer and Mr. Swift both highlighted safety concern related to 
pipelines that transport diluted bitumen. Ms. Quarterman, when 
PHMSA adopted its basic safety requirements, such as 
establishing maximum operating pressures or setting integrity 
management requirements, were many U.S. pipelines transporting 
diluted bitumen and were any of your regulations developed with 
the properties of diluted bitumen in mind?
    Ms. Quarterman. When the Integrity Management program 
requirements were first put in place on the hazardous liquid 
side I think it was 2000 and 2002, there were pipelines in 
existence that transport diluted bitumen. I don't believe any 
study was done at that time of the characteristics of the 
crude.
    Mr. Waxman. Were your regulations developed with the 
properties of diluted bitumen in mind?
    Ms. Quarterman. I don't believe it was a part of the 
equation, no.
    Mr. Waxman. Have you received your regulations to assess 
whether they adequately address any risks specific to diluted 
bitumen?
    Ms. Quarterman. We have not done so.
    Mr. Waxman. OK. I was pleased to hear your response to Mr. 
Rush regarding the requirement in S. 275 that PHMSA analyze the 
safety risks of tar sands crudes.
    Mr. Swift, why should we be concerned about pipeline safety 
with respect to diluted bitumen from tar sands?
    Mr. Swift. We have seen many indications that this crude is 
both more damaging to pipeline systems and potentially more 
dangerous in the event of a spill. We have done comparisons of 
the Albertan pipeline system that moves more of this stuff in 
which we found that that system had 16 times as many incidents 
of internal corrosion per mile. We have seen earlier 
indications on the U.S. pipeline system that has been used 
early to move this stuff. I mean we have only seen it in the 
last 10 years really explode by volume----
    Mr. Waxman. It not only is more corrosive; it may be moved 
at higher temperatures and pressures.
    Mr. Swift. That is right.
    Mr. Waxman. OK. Mr. Weimer, do we know whether the term 
``pipeline safety statutes'' are adequate to address the issues 
Mr. Swift identified with pipelines transporting tar sands?
    Mr. Weimer. I don't think we do. As Administrator 
Quarterman has said, they haven't done that study specifically 
yet like the Senate bill asks them to do. And there are some 
questions about the corrosivity and the abrasiveness and the 
pressure and temperature that need to be answered.
    Mr. Waxman. Well, I am concerned that the industry is 
changing but the safety regulations are not keeping up with the 
changes. That could be a recipe for disaster down the road.
    Mr. Swift, what steps could Congress take to ensure that 
pipelines carrying tar sands are properly regulated?
    Mr. Swift. I think the first step is we have to thoroughly 
examine the nature and magnitude of the risk. And so once we 
have the science, we can regulate the pipelines based on that 
science. So basically we need a study and then we need to get a 
system in place before we build more pipelines to move this.
    Mr. Waxman. Mr. Weimer, do you agree?
    Mr. Weimer. Yes.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Whitfield. Yes. The gentleman from Texas is recognized 
for 5 minutes.
    Mr. Barton. And Mr. Chairman, I am not going to use all 5 
because I know we have a series of votes.
    First, I just want to welcome Andy Black to the committee. 
I think most of the senior members remember Andy as a committee 
staffer back when I was chairman. Before that, he was also my 
legislative staff director. So it is interesting to see him on 
the other side of the desk there.
    My first question is just a general question. Is there 
anybody here at the table that does not support reauthorization 
of a pipeline safety bill in this Congress? So everybody is 
supportive of that? Is everybody supportive of continuing the 
general policy where we have kind of an interactive cooperative 
working arrangement between the regulators and the regulated 
parties? Is anybody OK with that? OK.
    My friend Mr. Waxman just commented on something called 
diluted bitumen. I think that is a fair question. My physics 
and chemistry is pretty limited. My engineering degree is about 
40 years old now but my recollection is that there are 3 kinds 
of items. You have a gas, a liquid, or a solid. Obviously, on 
pipelines you are not going to be transporting too many pure 
solids, but we do have gas pipelines and liquid pipelines. 
Within those general categories, different liquids, different 
gasses obviously have different characteristics, temperatures, 
flammability, volatility, viscosity, things like that. But is 
there any reason, Mr. Black, to feel that this diluted bitumen 
is of a special nature that it requires special regulations?
    Mr. Black. No. It is a heavy crude when it is moved through 
the pipelines. The bitumen is mixed with a condensate before it 
is a pipeline-quality transportation. That is like a heavy 
crude from California, Venezuela, and other oil sands. Diluted 
bitumen has been moved through pipelines for many years. There 
is a FERC tariff about elements of sediment and water that 
TransCanada Keystone XL would have to live up to. There are 
corrosion regulations implemented by PHMSA that Keystone XL 
will have to live up to.
    While there has not been a formal study by the 
administration, this has been a part of the multi-agency review 
process. There were many special conditions proposed for 
TransCanada by PHMSA. None of these deal with this idea that 
there is some incremental corrosiveness in the product. It is a 
heavy crude.
    Mr. Barton. OK. I want the record to show that I did not 
pre-clear that question with Mr. Black, but it sounds like he 
knew I was going to ask him the question. That was a very 
thoughtful answer.
    Administrator Quarterman, do you generally share the view 
that Mr. Black just proposed to the committee?
    Ms. Quarterman. Well, I don't believe that I am in a 
position to opine. My engineering degree is not quite as old as 
yours but it sounds like you remember more than I do. I would 
defer to any studies that might be performed by our Agency on 
answering that question.
    Mr. Barton. I think it is something, Mr. Chairman, we need 
to look into but I don't think it is definitive or 
determinative that that one thing should stop a reauthorization 
bill. With that, I would yield back to the chair.
    Mr. Whitfield. Thank you. We do have 24 votes on the House 
floor, and what we are going to do, we are going to try to give 
everybody here an opportunity to ask questions. So Mr. Green, 
we are going to go to you and then Mr. Olson and then Mr. 
Inslee because I don't want you to hang around for 2-1/2 hours 
or so.
    Mr. Green, you are recognized.
    Mr. Green. Thank you, Mr. Chairman. I will be as quick as I 
can.
    I have a district in Houston in East Harris County. I have 
never not lived on a pipeline. And I have noticed during my 
lifetime how much it is so much better than what we are 
getting. And I have a house now that we, on a regular occasion, 
get contacts from our pipeline safety state agencies, obviously 
the federal agencies. So our reauthorizations over my career on 
this committee have been thorough and I hope this would be the 
same thing.
    Let me go quickly, so Ms. Quarterman, I want to applaud you 
and the secretary for addressing the issue of pipeline safety 
head-on. There is a national dialogue on pipeline safety 
because that is probably the most number one issue in the 
district I represent because we live and work there. Pipelines 
are much safer than having them run down the road on a tank 
truck, but we have plenty of tank trucks, too.
    What kind of responses have you heard or you see from 
industry and others when you rolled out your call for action?
    Ms. Quarterman. The responses have been very positive. The 
secretary and I met with the leaders of several companies, 
presidents, and sat down and told them we wanted to have a 
conversation. We wanted to all work together, bring all the 
constituents together and try to figure out how we might move 
forward with our agenda. We just had a meeting yesterday out 
near Dulles. We are in the midst working with our technical 
advisory committees of putting together a report to America 
about the current status of pipeline safety in this country and 
how we might move that ball forward. So everything has been 
positive so far.
    Mr. Green. Can you explain when NEPA was triggered--I know 
that was a concern from Ranking Member Waxman--and when NEPA is 
triggered from your office?
    Ms. Quarterman. We are not involved with the Keystone XL 
project or the NEPA analysis. We are not performing the NEPA 
analysis. It is being led by the Department of State. I don't 
know if that is where you are going to.
    Mr. Green. OK. And I understand that if you have more 
corrosive going through a pipeline and some of the substance, 
you just have to make sure you inspect it a lot more and, you 
know, and you check it because metrology is something that has 
been done for decades.
    Mr. Black, if Congress decides to expand the PHMSA's reach 
on the offshore gathering pipelines, what are your concerns? 
And my understanding is that these gathering lines may not be 
large enough to use smart pigs.
    Mr. Black. Right, gatherings generally intrastate can be 
regulated by the States. If it is on the OCS it can be 
regulated by interior. Like you said, Congressman, these are 
small lines, maybe 2 inches to 8 inches in diameter operating 
at low stress. Some of these things are marginally economic or 
serving marginally economic wells. Depending on what PHMSA 
would do with regulations, it could result in some shut-in 
supply.
    Mr. Green. Well, and I know because shallow-well drilling 
you do have marginal wells, ones that may not be big, although 
our committee was actually on a rig in deepwater and those 
pipelines--from that deepwater is a Chevron rig off Louisiana--
actually were big enough because they had enough production, 
you know, 110,000 barrels a day you could have that.
    Mr. Chairman, I appreciate it and I would like to yield 
what I have left to my colleague from Washington.
    Mr. Inslee. Thank you, Mr. Green. First, I want to thank 
Mr. Weimer for your leadership. I think of Liam Wood and Wade 
King and Stephen Tsiorvas. We appreciate your leadership.
    Quick question for Ms. Quarterman. The information we have 
today and others have suggested that there is some viable 
concern about this relatively new product from the tar sands 
and what risks it may or may not present. Doesn't it make sense 
from a first-do-no-harm sense for us to have a sophisticated 
analytical objective analysis of this particular product before 
we decide what the appropriate maintenance systems and 
inspections systems are?
    Ms. Quarterman. I would have to leave that up to Congress 
in terms of whether or not you would like to legislate such a 
requirement. I don't want to get into the Department of State's 
jurisdiction in terms of whether or not to approve this project 
or not. I am going to leave it with them to give an opinion 
about----
    Mr. Inslee. Well, I am not thinking of just whether or not 
to approve this particular project. The issue is shouldn't we 
have an objective assessment of the corrosive properties and 
perhaps new maintenance requirements for this or any other line 
just as a matter of national policy? Don't we really need that 
from your Agency?
    Ms. Quarterman. Well, our Agency is not really involved 
until a pipeline has been permitted. The secretary has gone 
around and said quite a bit about the fact that we have a bit 
of a patchwork here in that the FERC, for example, is 
responsible for deciding on whether or not a gas pipeline will 
be approved and we only come in after the fact. On the oil 
side, the only time there is any oversight on whether a 
pipeline will be put in the ground is if it crosses 
international boundaries, and that is the case with respect to 
Keystone XL. Otherwise, there is no federal regulatory review 
or approval of putting a pipeline in the ground. That is a 
broader question, I think, for the committee about how that 
works and whether it makes sense.
    Mr. Inslee. We have some work to do. Thank you.
    Mr. Whitfield. Mr. Olson?
    Mr. Olson. I thank the chair for his exceptional courtesy 
and want to welcome the witnesses and thank you for coming and 
giving us your time and your expertise.
    First of all, I just want to start by giving some of my 
perspectives as a representative of Texas 22. No one here in 
Congress cares more about pipeline safety than Congressman Pete 
Olson does. I represent Texas 22, which is part of the energy 
capital of the United States. And we are Texans. Texas is the 
energy capital of the world, and we have these tremendous 
petrochemical facilities along the Port of Houston, which is 
the largest--the tonnage and gross international tonnage in 
America. And the pipeline infrastructure that supports the port 
and the petrochemical industry is critical to our economy not 
only in Southeast Texas but the entire country.
    But not only are the pipelines part of our economy, they 
are a part of our quality of life. And just an example that is 
about a mile from my house in Sugarland, Texas is Sugarland 
Memorial Park, and right next to that is the University of 
Houston, Sugarland. These are fairly new facilities built the 
last 10 years. I take my dog Riley walking through the park 
every day I am home. And they are built right on a natural gas 
pipeline, which runs right through the middle of them. Again, 
very, very safe.
    And since I have joined Energy and Commerce, I have spent a 
lot of my time when I am back home talking to some of the 
pipeline operators just to get up to speed on what they are 
doing and what their safety is like. And one great privilege I 
have representing this district is I also represent the Johnson 
Space Center, you know, home of NASA, Mission Control. And I 
can tell you, I can assure you that having seen Mission Control 
on the inside and having seen the control room for these 
pipeline operations, it is very hard to tell which one is 
which. I mean the technology is amazing.
    I mean one pipeline--one company I toured had pipelines all 
across the northeastern part of the United States with the 
control room right there in Houston, Texas. They had an 
automatic system. If there is a drop in pressure somewhere 
between all the little terminals they have, automatically 
downstream it would be shut off. They had a man just in case 
the system didn't work. A man was there, a human being, 
watching, monitoring the system who could hit a button and shut 
it off from Houston, Texas. It is just an amazing, amazing 
amount of safety that these pipeline companies have. And I 
think the American people deserve to know that.
    I know we all agree that there should be zero pipeline 
incidents. That should be our goal. But again, I am concerned 
about some of the things we are talking about doing here from a 
regulatory perspective. And my first question is going to be 
for Mr. Black and Mr. Dippo. And I would like these comments 
from you, Administrator Quarterman.
    But as I understand right now, the determination of what is 
considered a high-consequence area is risk-based, makes sense. 
If our pipeline miles, all of them are concerned under HCA 
standards, wouldn't that diminish the focus of where we should 
be focusing? I mean where it truly has a greater consequence, 
population centers, unusually sensitive areas, environmental 
areas, drinking water intakes, wildlife refuges, my home in 
Sugarland, a mile and a half of pipeline? I mean shouldn't that 
pervade as opposed to making it standard all across the 
country? And again, Mr. Black, would you like to take a shot at 
that?
    Mr. Black. Well, we think it is right to have high-
consequence areas. And Congress and PHMSA are right to 
implement them that way. It would divert the focus on those 
areas of highest consequence if the integrity management areas 
were going to be expanded. Operators do a lot on the areas of a 
pipeline beyond high-consequence areas, and there are a lot of 
federal regulations that require that. There are voluntary 
assessments of those areas outside of a high-consequence area. 
But you don't follow the same rigid repair criteria that you do 
inside. So we think it is right to keep the focus on a high-
consequence area, yes, sir.
    Mr. Olson. Mr. Dippo, do you care to comment, sir?
    Mr. Dippo. Yes, I would agree with everything Mr. Black 
said, and in addition I would just like to indicate that, you 
know, as an operator in New Jersey being the most densely 
populated State, our State Regulatory Commission has looked at 
it from that perspective and has regulated and asked us to look 
at more than just high-consequence areas. But that is specific 
to our State and our operations in New Jersey. So I don't 
believe and I don't think that it should be applied across the 
board. Certain areas, yes, but other than that, no.
    Mr. Olson. Yes, sir. I have 26 seconds. Administrator 
Quarterman, would you like to make a comment, ma'am?
    Ms. Quarterman. Yes. We have a pending rulemaking asking a 
question regarding this and there are two ways to think of 
this. One is whether or not the definition of a high-
consequence area is adequate as it stands. There have been some 
incidents that occurred recently where it was obvious to me it 
was a high-consequence area because there were spills in a 
large body of water except it wasn't clear when we were trying 
to figure out was this in fact a high-consequence area. So I 
think we have to make sure that the definition is adequate.
    The second is that in terms of dealing with high-risk areas 
first, I think that is absolutely appropriate. However, that 
doesn't mean that the remaining areas could not also be 
assessed perhaps on a longer time period, something like that I 
think those are things that we are considering and want to 
discuss further.
    Mr. Olson. Yes, ma'am. If I could just sum up, the people 
in my district want a high-consequence area to be a high-
consequence area. I appreciate my time and yield back the 43 
seconds that I am over.
    Mr. Whitfield. That concludes today's hearing. We actually 
had other questions we wanted to ask but, as I said, we have 
got these 20-some votes on the floor and a Motion to Recommit. 
So we look forward to working with all of you as we move 
forward with reauthorization legislation. Thank you for your 
time and your input. And this hearing is concluded.
    [Whereupon, at 12:00 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                Prepared Statement of Hon. John Sullivan

    Today marks the 11th day in our American Energy Initiative 
hearing. While the series has allowed us to examine a multitude 
of issues regarding energy production, regulation and 
consumption, today we will focus on what can be done to improve 
the safe and secure delivery of oil and natural gas via 
pipeline.
    Several tragic pipeline accidents have occurred over the 
past year which demonstrates the need to reauthorize and 
enhance current safety laws. Despite this Committee room 
frequently being the site of many tense debates and 
discussions, pipeline safety is an issue I hope we all can work 
together on to produce meaningful and effective legislation to 
ensure the safety of our oil and gas pipeline infrastructure 
for the future while protecting the American people and our 
environment.
    Over the past several years, we have been able to pass 
bipartisan bills on pipeline safety sometimes under suspension 
on the House floor. This is because our pipeline infrastructure 
touches every congressional district and accidents can happen 
anywhere and at anytime. Before us at the witness table we have 
a Democrat from California and a Republican from Montana. Both 
have dealt with major accidents recently and both understand 
Congress must act to strengthen current pipeline laws.
    It is critically important that our pipeline infrastructure 
is both reliable and durable and to this end, the discussion 
draft under examination today makes many important 
modifications to existing law that will promote greater 
pipeline safety standards. We are glad to have an opportunity 
today to hear from the experts how this discussion draft might 
be improved or otherwise modified to ensure pipelines remain a 
safe and economical means of transporting vital energy supplies 
that help power our economy and create jobs.
    With that, I yield the balance of my time to Mr. Barton for 
an opening statement.
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